The Louisiana Fifth Circuit Court of Appeal recently considered the validity a Jones Act settlement in the context of an exception of res judicata.  The plaintiff, Randy James Rudolph, was injured in a vessel collision while working as a deckhand.  Rudolph sued his employer, D.R.D. Towing (“employer”), and others in Louisiana state court alleging that he was a Jones Act seaman and was entitled to maintenance and cure.

Employer denied Rudolph’s allegations and also filed an exception of res judicata.  Employer claimed that Rudolph executed a receipt and release shortly after the accident in settlement of all claims.  In opposition, Rudolph submitted an affidavit accounting the purported settlement.  The trial court ultimately granted the employer’s exception and Rudolph appealed.

On appeal, the Louisiana Fifth Circuit discussed the “substantial federal jurisprudence recognizing the special status of seamen and defining the role of state courts in the application of the law with regard to seamen.”  Importantly, the burden is on the one who sets up a seaman’s release, here the employer, to show it was executed freely, without deception or coercion, and was made by the seaman with a full understanding of his rights.

The court highlighted the four factors that guide an analysis of the validity of a seaman’s release:

(1) The adequacy of the consideration—did the seaman receive fair compensation in light of the extent of injuries and the risk of trying his case?

(2) The available medical advice—did the seaman know the full extent of his injuries and the need for future medical care?

(3) The legal advice available and given—did the seaman have full knowledge of his legal rights?

(4) The nature of the negotiation—did the party seeking to secure the release overreach?

Applying these factors, the court found that Rudolph’s release was invalid.  The release, which was executed three days after the accident in employer’s offices, was overseen by a non-lawyer consultant hired by the employer.  The consultant knew at the time of the release that Rudolph was experiencing health issues and had a medical appointment later that day.  The consultant also failed to explain Rudolph’s right to maintenance and cure and indemnity and medical benefits.  Further, the consultant knew Rudolph was not represented by counsel and never advised him of his right to obtain counsel.  The court found that a transcript of the interaction supported Rudolph’s contention that he believed he was only settling his claims for the possessions he lost when the boat sank.  In addition, the $3,000 settlement amount was not adequate to cover Rudolph’s property losses and medical expenses.  In sum, the court found that Rudolph had not “signed the release with full understanding and knowledge of his rights and a full appreciation of the consequences of the release.”

Finding that the release was invalid, the court set it aside and reversed the trial court’s grant of the employer’s exception of res judicata and remanded the case for further proceedings.

Rudolph v. D.R.D. Towing Co., LLC, et al., 11-1074 (La. App. 5 Cir. 4/24/12); 2012 WL 1415135